ECC approves Rs 8 billion grant to cash-strapped PIA to meet emergency needs

A Pakistan International Airlines (PIA) aircraft prepares to take off at Allama Iqbal International Airport in Lahore on February 1, 2012.  - Reuters
A Pakistan International Airlines (PIA) aircraft prepares to take off at Allama Iqbal International Airport in Lahore on February 1, 2012. – Reuters
  • PIA needs Rs 25 billion to restructure outstanding loans.
  • The caretaker government wants to move towards privatization.
  • Aviation proposal approved for bridge financing through CAA.

ISLAMABAD: The Economic Coordination Committee (ECC) of the federal cabinet approved Rs 8 billion from the resources of the Civil Aviation Authority (CAA) as financing to meet the emergency requirements of the cash-strapped Pakistan International Airlines (PIA). Is.

In its brief presented before the ECC, the CAA had sought financial assistance of Rs 25 billion on an immediate basis to keep the airline afloat and restructuring of the outstanding loans for a period of next six months.

However, the caretaker government continued to take half-hearted decisions approving only Rs 8 billion as bridge financing from CAA resources for the emergency needs of the national flag carrier. news Reported on Saturday.

“This contingency requirement of Rs 8 billion will only help Malaysia pay mainly for down payment and some other obligations,” said a participant of the ECC meeting, speaking. news Here on Friday.

PIA needs financial assistance of Rs 25 billion on a monthly basis for the next six months and restructuring of outstanding loans worth Rs 10.5 billion, but the government is in no mood to contribute any money from its own pocket. It is now in a position to provide guarantees to enhance financial obligations.

Although the PIA had failed in the past to come up with a viable restructuring plan and each time they had made only superficial claims of achieving change at the time of securing funds with the support of the Finance Division, now the caretaker government used the IMF program and fiscal deficit. But its status as a bond to further advance the subsidy amount, with particular reference to achieving a primary surplus of 0.4% of GDP.

But now PIA is moving towards closure but the caretaker government only wants to maintain its operations and then move towards privatization as soon as possible.

According to the official statement issued by the Finance Ministry after the meeting, Interim Finance Minister Dr. Shamshad Akhtar presided over the ECC meeting.

The meeting was attended by Acting Minister for Privatization, Fawad Hasan Fawad, Acting Minister for Planning and Development, Sami Saeed, Acting Advisor to the Prime Minister on Aviation, Air Marshal Farhat Hussain Khan, Federal Secretaries and other senior officials of line ministries. ,

The single-item agenda presented by the Aviation Division was considered at the meeting.

The Aviation Division submitted a proposal for provision of financial assistance to PIACL through the Civil Aviation Authority for certain emergency needs of the airline.

After detailed discussion and deliberations, the ECC decided to approve the proposal of Aviation Division for bridge financing through CAA resources amounting to Rs 8 billion for PIA to meet the contingent requirements related to overdue payments .

The ECC permitted the Aviation Division to proceed with the bilateral arrangement between CAA and PIA.

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